- Sterling slides but recovers because politics is happening
- USD awaits Federal Reserve decision
- Aussie business confidence slides a little
By David Johnson
Politics appears to have come over all ‘inclusive’, as it is rumoured that some of the Tories are speaking to some of the Labour Party members to soften the Brexit blow. Do these people have no idea about how to negotiate? Sterling had a torrid Monday as the politicking continued but, having fallen into the €1.12 area, it has recovered to €1.1320 this morning. The Pound has remained rather flat against the US Dollar; hovering around 1.27 as I write. If this morning’s inflation data shows the 2.7% to 2.9% levels most forecasters are predicting, Sterling will regain a little more support.
Australian business confidence reduced in May, but the markets kind of shrugged that off. Australians coming back to work after the Queen’s Birthday public holiday saw the GBP-AUD exchange rate fall initially, but then rise back to the levels it was reaching throughout Monday.
Euro traders will be awaiting the Eurozone ZEW Economic Sentiment Index, which is forecast to be slightly more positive than last month. That’ll help the Euro, but the German one is perhaps the most influential and that is forecast to show yet another solid improvement, in spite of the stronger Euro.
This afternoon brings US Producer Price data, which is forecast to have slipped back a little from last month’s 2.5% growth. The US Dollar is pretty sanguine, though, as traders await the Federal Reserve interest rate decision and statement due on Wednesday evening (UK time). There is a distinct possibility of a rate hike from the Fed and that would strengthen the USD but, if Janet Yellen’s team decide to hold their horses in anticipation of further confirmatory data, the USD will drop – initially at least.
Have a great Tuesday.
A lot of people complain about their ‘dumb boss’. What they don’t realise is they’d probably be out of a job if their ‘dumb boss’ were any smarter.
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